LawsonGroupMediation

In a news article July 8, 2009 in DS News (http://www.dsnews.com/index.php/home/news_story/3202/1/0), it is reported that over the last two years, lenders often believe they will make more money from a foreclosure than from workouts such as loan modifications and short sales.  This would especially be true of the servicing lenders.

In a number of geographical regions, I have seen reports that agents have approximately 27-30% close rate of short sales.  While anecdotal, it tracts the experiences of many agents.  Many of you have much higher rates of success, and the agents that work with my firm also report a very high close rate, many of them greater than 90% close rates, even though they often work problem short sale cases.

There are some short sale agents who have a 90-100 % close rate, but analysis shows that most of those agents only take cases in which it is a slam dunk. Most of them only accept short sales with a net to lender greater than 90%, with no issues, and with only certain lenders.

The above article shows a motivation to reject short sales; however, government rules and federal law require lenders to participate in workout programs, including short sales.  Thus, if the lenders are motivated to reject the short sale while the law requires them to participate in workout programs, you can see that many lenders will find reasons to reject yoru proposal.

To prevent lenders from tanking your proposal, it is critical that you prepare a short sale proposal in a professional manner; that you conduct a complete legal and marketing analysis; and that you avoid the mistakes made by many agents that lenders use as excuses to tank the proposal.  You must also make certain that purchase contracts net to the lender the minimum threshold percentage.  That is difficult, especially if you cannot find out in advance who the SMI is and what their minimum threshold is for that loan product.

Our short sale course is designed to help you avoid the mistakes that agents commonly make, to maximize the likelihood of approval.  The book Short Sales & Loan Modifications: A Practical Guide For Real Estate Agents and Investors provides an in-depth guide to each step of the short sale process.  The Short Sale Business Manual provides all of the legal disclosures, forms and samples to help make your short sale business a success.